Yesterday we hosted a roundtable with Rachel Reeves MP with some of our self-employed and freelance Collective Members. Rachel is carrying out work to look at responses to the increasing importance of self-employment in the UK.
Since November last year the number of self-employed people has increased by well over 200,000, which means that over 15% of all people in work are now self-employed, which is almost 5m people in the UK. Self-employment has accounted for more than half the country’s employment growth since 2008 and is growing so quickly that – on current trends – there’ll be more self-employed workers in the UK by 2018 than people working in the public sector.
The way we work is changing, business innovation, technological advancement and lifestyle preferences are combining. By and large, flexibility is popular. Surveys consistently show self-employed people are happier with their work than workers who are employees. That is not particularly surprising and was something that was almost unanimously agreed yesterday. Self-employment is extremely rewarding, a sense of autonomy, purpose and other people recognising your value is good for you.
While there are obvious benefits of self-employment, there is also a prevalent. issue with job security. While 92% of people consider it to be important, only 65% people think their job is secure, and 15% think it is insecure – that’s around 5 million people wondering if they will be able to pay the bills each month.
— Collective (@CMDNCollective) November 21, 2016
Interestingly, our self-employed Collective Members said that they feel more secure in their work because they are self-employed, and because their income is dependent upon several contracts, rather than a sole employer.
But not everyone’s new experience of work is positive. One of the interesting changes over recent years is that stress in employment used to be correlated with seniority, but now those with lower incomes are just as likely to suffer anxiety at work.
Thanks for having me – stimulating discussion about the future of self employment https://t.co/ETBhePzBWE
— Rachel Reeves (@RachelReevesMP) November 21, 2016
Many of us have become aware of this issue through the growth of the ‘gig economy’. You can’t help but have seen Deliveroo riders in their reflective mint jackets and a growing number of Prius cars on the streets of London. There have been a number of high profile disputes between Deliveroo, Uber and their workers. The Independent Workers Union of Great Britain (IWGB) has written to Deliveroo’s chief executive asking the firm to recognise it as a union representing riders in Camden no less.
Without pointing out the obvious, courts are generally neither a good nor a speedy way for the law to be shaped. The Uber case is still quite narrow and only addressed the circumstances specific to it.
There is of course a huge difference between someone working as a self-employed freelancer in the creative industries and a worker on a zero hours contract desperate for greater job security. The description of self-employed is almost as broad as the challenges facing this mode of working, something raised yesterday. New policy, probably shouldn’t primarily be aimed at protecting Camden Collective Members, but workers with low(er) security, rights and pay.
— Rachel Carrell (@RachCarrell) November 21, 2016
The common recurring theme yesterday was to do with the recognition of new business models and ways people are now working.
- Recognition from employers that goes beyond the minimum statutory requirements to do with everything from working hours to payment terms.
- Recognition from banks which ranged from everything to do with business bank accounts to difficulty agreeing mortgages.
- Recognition from trade unions of the growth of self-employment and the growing need for collective bargaining to protect workers’ rights.
- Recognition from government to do with everything from tax brackets, employment status, maternity rights, sick pay and a growing chance future pension provision will be inadequate.
- Recognition from landlords and (would you believe it) mobile phone companies who don’t offer contracts to self-employed people.
There are also a number of questions around how the unique business models arising from the gig economy should be recognised in terms of tax and employment status. Rachel is publishing a pamphlet on self-employment in the new year that will explore these questions in more depth, and Camden Town Unlimited will contribute to this.
— Florence Wilkinson (@Flo_Wilk) November 21, 2016
Government can obviously play an important role, but there is clearly changes that banks, pension providers, employers and companies can make.
Some of the policy suggestions that were proposed by our Collective Members yesterday included:
- A government service like the Tenancy Deposit Scheme where self-employed people and employers would agree a fee in advance, which would be paid, and then which would have a resolution centre to help self-employed workers to be paid on time.
- An enhanced Camden Collective that goes beyond providing a physical space and fast internet, and includes a support network to help with advice from everything to do with accountancy, pensions, insurance and client disputes.
- A streamlined online tax payment/PAYE service that protects self-employed workers cashflow and makes the whole process much easier to understand and carry out.
- And finally, the rather obvious suggestions to equalise the amount of NICS paid by self-employed and employed workers so there is less of a financial incentive for employers to treat people as self-employed (good luck to any politician raising a tax on jobs though!)